395 U.S.

642
89 S.Ct. 1871
23 L.Ed.2d 599

Clyde A. PERKINS, Petitioner,

v.
STANDARD OIL COMPANY OF CALIFORNIA.
No. 624.
Argued April 22, 23, 1969.
Decided June 16, 1969.
Rehearing Denied Oct. 13, 1969.

See 90 S.Ct. 36.

Earl W. Kintner and George R. Kucik, Washington, D.C., for petitioner.
Richard J. MacLaury, San Francisco, Cal., for respondent.
Mr. Justice BLACK delivered the opinion of the Court.

In 1959 petitioner, Clyde A. Perkins, brought this civil antitrust action against
the Standard Oil Company of California seeking treble damages under 2 of
the Clayton Act, as amended by the Robinson-Patman Act, 1 for injuries alleged
to have resulted from Standard's price discriminations in the sale of gasoline
and oil during a period of over two years from 1955 to 1957. In 1963, after a
lengthy and complicated trial, the jury returned a verdict for Perkins and
assessed damages against Standard of $333,404.57, which, after trebling by the
court and after the addition of attorney's fees, resulted in a total judgment
against Standard of $1,298,213.71. On review, the Court of Appeals for the
Ninth Circuit held that the assessment of damages included injuries to Perkins
that were not recoverable under the Act and therefore ordered a new trial.
Standard Oil Co. of California v. Perkins, 9 Cir., 396 F.2d 809. We granted
certiorari to determine whether the Court of Appeals, in reversing the judgment,
had correctly construed the Robinson-Patman Act.

Petitioner Perkins entered the oil and gasoline business in 1928 as the operator
of a single service station in the State of Washington. By the mid-1950's he has

become one of the largest independent distributors of gasoline and oil in both
Washington and Oregon. He was both a wholesaler, operating storage plants
and trucking equipment, and a retailer through his own Perkins stations. From
1945 until 1957, Perkins purchased substantially all of his gasoline
requirements from Standard. From 1955 to 1957 Standard charged Perkins a
higher price for its gasoline and oil than Standard charged to its own Branded
Dealers,2 who competed with Perkins, and to Signal Oil & Gas Co., a
wholesaler whose gas eventually reached the u mps of a major competitor of
Perkins. Perkins contends that Standard's price and price-related
discriminations against him seriously harmed his competitive position and
forced him, in 1957, to sacrifice by sale what remained of his once independent
business to one of the major companies in the gasoline business, Union Oil.
3

Many of the elements of liability on the part of Standard are not in dispute.
Standard has admitted that it sold gasoline and oil to its Branded Dealers and to
Signal Oil at discriminatorily lower prices than those at which it sold to
Perkins. The Court of Appeals found that Standard's liability for the harm done
Perkins by the favorable treatment of the Perkins by the favorable treatment
pute. Of this aspect of the damages, the Court of Appeals said:

'The Branded Dealers purchased gasoline and oil from Standard which they in
turn sold at retail. With respect to them, Perkins' story is quickly told. Because
of Standard's favoritism and discrimination they were able to and did offer
lower prices and better services and facilities than Perkins in marketing at
retail.' 396 F.2d, at 812.

With regard to Perkins' damage resulting from Standard's discrimination in

favor of Signal Oil, however, the Court of Appeals took a different view
because of the following circumstances under which the discriminary sales
were made. Standard admittedly sold gasoline to Signal at a lower price than it
sold to Perkins. Signal sold this Standard gasoline to Western Hyway, which in
turn sold the Standard gasoline to Regal Stations Co., Perkins' competitor.
Perkins alleged that the lower price charged Signal by Standard was passed on
to Signal's subsidiary Western Hyway, and then to Western's subsidiary, Regal.
Regal's stations were thus able to undersell Perkins' stations and, according to
Perkins, the resulting competitive harm, along with that he suffered at the hands
of Standard's favored Branded Dealers, destroyed his ability to compete and
eventually forced him to sell what was left of his business. The Court of
Appeals held, however, that any harm suffered by Perkins from impaired
competition with Regal stations was beyond the scope of the Robinson-Patman
Act because Regal was too far removed from Standard in the chain of
distribution. A substantial part of the damages the jury assessed against

Standard, as the Court of Appeals viewed it, might have been based upon a
finding that Perkins suffered competitive harm from the price advantage held
by Regal stations. That court, concluding that 'the whole verdict is tainted, since
the amount reflected in it by Regal's conduct cannot be ascertained; * * *'
reversed the judgment and ordered a new trial. 396 F.2d, at 813.
6

We disagree with the Court of Appeals' conclusion that 2 of the Clayton Act,
as amended by the Robinson-Patman Act, does not apply to the damages
suffered by Perkins as a result of the price advantage granted by Standard to
Signal, then by Signal to Western, then by Western to Regal. The Act, in
pertinent part, provides:

'(a) It shall be unlawful for any person engaged in commerce, * * * either

directly or indirectly, to discriminate in price between different purchasers of
commodities of like grade and quality, * * * where the effect of such
discrimination may be substantially to lessen competition or tend to create a
monopoly in any line of commerce, or to injure, destroy, or prevent competition
with any person who either grants or knowingly receives the benefit of such
discrimination, or with customers of either of them * * *'.

The Court of Appeals read this language as limiting 'the distributing levels on
which a supplier's price discrimination will be recognized as potentially
injurious to competition. 396 F.2d, at 812. According to that court, the
coverage of the Act is restricted to injuries caused by an impairment of
competition with (1) the seller ('any person who * * * grants * * * such
discrimination'), (2) the favored purchaser ('any person who * * * knowingly
receives the benefit of such discrimination'), and (3) customers of the
discriminating seller or favored purchaser ('customers of either of them'). Here,
Perkins' injuries resulted in part from impaired competition with a customer
(Regal) of a customer (Western Hyway) of the favored purchaser (Signal). The
Court of Appeals termed these injuries 'fourth level' and held that they were not
protected by the Robinson-Patman Act. We conclude that this limitation is
wholly an artificial one and is completely unwarranted by the language or
purpose of the Act.

In FTC v. Fred Meyer, Inc., 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222
(1968), we held that a retailer who buys through a wholesaler could be
considered a 'customer' of the original supplier within the meaning of 2(d) of
the Clayton Act, as amended by the Robinson-Patman Act, a section dealing
with discrimination in promotional allowances which is closely analogous to
2(a) involved in this case. In Meyer, the Court stated that to read 'customer'
narrowly would be wholly untenable when viewed in light of the purposes of

the Robinson-Patman Act. Similarly, to read 'customer' more narrowly in this

section than we did in the section involved in Meyer would allow price
discriminators to avoid the sanctions of the Act by the simple expedient of
adding an additional link to the distribution chain. Here, for example, standard
supplied gasoline and oil to Signal. Signal, allegedly because it furnished
Standard with part of its vital supply of crude petroleum, was able to insist
upon a discriminatorily lower price. Had Signal then sold its gas directly to the
Regal stations, giving Regal stations a competitive advantage, there would be
no question, even under the decision of the Court of Appeals in this case, that a
clear violation of the Robinson-Patman Act had been committed. Instead of
selling directly to the retailer Regal, however, Signal transferred the gasoline
first to its subsidiary, Western Hyway, which in turn supplied the Regal
stations. Signal owned 60% of the stock of Western Hyway; Western in turn
owned 55% of the stock of the Regal stations. We find no basis in the language
or purpose of the Act for immunizing Standard's price discriminations simply
because the product in question passed through an additional formal exchange
before reaching the level of Perkins' actual competitor. From Perkins' point of
view, the competitive harm done him by Standard is certainly no less because
of the presence of an additional link in this particular distribution chain from
the producer to the retailer. Here Standard discriminated in price between
Perkins and Signal, and there was evidence from which the jury could conclude
that Perkins was harmed competitively when Signal's price advantage was
passed on to Perkins' retail competitor Regal. These facts are sufficient to give
rise to recoverable damages under the Robinson-Patman Act.
10

Before an injured party can recover damages under the Act, he must, of course,
be able to show a causal connection between the price discrimination in
violation of the Act and the injury suffered. This is true regardless of the 'level'
in the chain of distribution on which the injury occurs. The court below held
that, as a matter of law, 'Section 2(a) of the Act does not recognize a causal
connection, essential to liability, between a supplier's price discrimination and
the trade practices of a customer as far removed on the distributive ladder as
Regal was from Standard.' 396 F.2d, at 816. As we have noted above, we do
not accept such an artificial limitation. If there is sufficient evidence in the
record to support an inference of causation, the ultimate conclusion as to what
that evidence proves is for the jury. Continental Ore Co. v. n ion Carbide, 370
U.S. 690, 700701, 82 S.Ct. 1404, 1411, 8 L.Ed.2d 777 (1962). Here the trial
judge properly charged the jury that Perkins had the burden of showing that any
damage to his business was proximately caused by Standard's price
discriminations and there was substantial evidence from which the jury could
infer causation. There was evidence that Signal received a lower price from
Standard than did Perkins, that this price advantage was passed on, at least in

part, to Regal, and that Regal was thereby able to undercut Perkins' price on
gasoline. Furthermore, there was evidence that Perkins repeatedly complained
to Standard officials that the discriminatory price advantage given Signal was
being passed down to Regal and evidence that Standard officials were aware
that Perkins' business was in danger of being destroyed by Standard's
discriminatory practices. This evidence is sufficient to sustain the jury's award
of damages under the Robinson-Patman Act.
11

One other minor group of damages was found to be improper by the Court of
Appeals and we conclude that this ruling was also erroneous. Perkins submitted
some evidence tending to show that he as an individual had suffered financial
losses because the two failing Perkins corporations (Perkins of Washington and
Perkins of Oregon) were unable to pay him agreed brokerage fees for securing
gasoline, rental on leases of service stations, and other indebtedness. The Court
of Appeals, in order to give guidance to the trial judge at the proposed new
trial, noted that, in its opinion, these damages were not proximately caused by
Standard's violations and that Perkins should not recover for these damages in a
second trial. For this proposition the Court of Appeals cited Karseal Corp. v.
Richfield Oil Corp., 9 Cir., 221 F.2d 358, 363, which held that 'the rule is that
one who is only incidentally injured by a violation of the antitrust laws,the
bystander who was hit but not aimed at,cannot recover against the violater.'
It is clear in this case, however, that Perkins was no mere innocent bystander;
he was the principal victim of the price discrimination practiced by Standard.
Since he was directly injured and was clearly entitled to bring this suit, he was
entitled to present evidence of all of his losses to the jury. Moreover, it is
obvious from the opinion of the Court of Appeals that this question was being
decided, not because there was any reversible error at the first trial, but in order
to give guidance for the conduct of any new trial. The record in this case does
not show that the jury included an award for any of these minor items in its
judgment. It is impossible to say that they were included because they were not
covered in the trial judge's charge to the jury. While the trial judge treated
many items of damage specifically, there was no chargeeither specific or
generalupon which the jury could have felt free to include such items in its
award. For this reason, the Court of Appeals could not have reversed the jury's
verdict in this case on this ground.

12

Respondent has argued in its brief several minor trial rulings which it contends
were in error. Most of these additional arguments were rejected by the Court of
Appeals. We have examined the others and find them without merit. We
therefore see no need to prolong this litigation which began nearly 10 years
ago. The jury's verdict and judgment should be reinstated. It is so ordered.

13

Verdict and judgment reinstated.

14

Mr. Justice HARLAN took no part in the consideration or decision of this case.

15

Mr. Justice MARSHALL, with whom Mr. Justice STEWART joins, concurring
in part and dissenting in part.

16

I agree with the Court that the judgment of the Court of Appeals cannot be
affirmed. But I cannot agree either with the broad, and somewhat vague, ground
of decision chosen by the Court or with the conclusion that the jury verdict in
this case must be reinstated.

17

As I view it, this case poses only a very narrow question. Respondent
discriminated in price in favor f Signal Oil & Gas Co. Through a chain of
majority-owned subsidiaries, Signal marketed this gasoline at stations which
competed with petitioner's outlets. Since we are dealing with a chain of
majority-owned subsidiaries, it seems quite likely that the discriminatory price
given Signal would have a vital effect on the pricing decisions of the stations
which eventually marketed Signal's gasoline. Even if the lower price were not
passed on to the company marketing the gasoline, that company would be more
willing to accept losses in a protracted price war if it knew that its 'grandfather'
corporation were making some extra, and partially off-setting, profits. For this
reason, and since in interpreting the antitrust laws '(w)e must look at the
economic reality of the relevant transactions,' United States v. Concentrated
Phosphate Export Assn., Inc., 393 U.S. 199, 208, 89 S.Ct. 361, 367, 21 L.Ed.2d
344 (1968), I would treat Signal, the beneficiary of the discriminatory price, as
if it were directly competing with petitioner's stations. Respondent's price
discrimination, on this view, in effect injured competition with a company
which 'knowingly receive(d) the benefit of such discrimination,' Clayton Act
2(a), 38 Stat. 730, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15
U.S.C. 13(a), and the case could properly go to the jury for determination of
'causation' and damages. Accordingly, I see no reason to intimate, even by
indirection, what the result would be if wholly independent firms had
intervened in the distribution chain. I would therefore explicitly limit the
holding to the facts of the case before us.

18

Moreover, I see no reason for the Court to undertake the difficult task of sorting
out all the other issues in this case. The Court of Appeals based its reversal
solely on its view of the 'fourth line injury' problem. Other issues were treated
on the assumption that the case would have to go back for trial. The record in
this case is long and complicated and we have no idea what view the Court of

Appeals would have taken about respondent's other allegations of error had the
major prop for its decision been removed. The law under the Robinson-Patman
Act is convoluted enough without the addition of numerous explicit and
implicit holdings which may come back to bedevil us in future years. I would
leave these other problems unresolved so that the Court of Appeals can look at
them anew in the context of this Court's holding on the major issue of general
importance presented by the petition for certiorari.

Section 2 of the Clayton Act, 38 Stat. 730, as amended, 49 Stat. 1526, 15

U.S.C. 13, provides in pertinent part as follows:
'(a) It shall be unlawful for any person engaged in commerce, in the course of
such commerce, either directly or indirectly, to discriminate in price between
different purchasers of commodities of like grade and quality, where either or
any of the purchases involved in such discrimination are in commerce, where
such commodities are sold for use, consumption, or resale within the United
States or any Territory thereof or the District of Columbia or any insular
possession or other place under the jurisdiction of the United States, and where
the effect of such discrimination may be substantially to lessen competition or
tend to create a monopoly in any line of commerce, or to injure, destroy, or
prevent competition with any person who either grants or knowingly receives
the benefit of such discrimination, or with customers of either of them * * *.'

Branded Dealers were independent operators of Standard's Signal and Chevron

stations who marketed gasoline and oil under Standard's brand names. During
the claim period the Signal Branded Dealers had no connection with Signal Oil
& Gas Co., which is involved in this litigation as a wholesaler.